Fixed establishment for VAT; what are the consequences?

Entrepreneurs who have a branch in another country may have a fixed establishment. If there is a fixed establishment from a VAT perspective, this has various consequences for you as a business. These include consequences for:

  • Services you provide to third parties 
  • Services you purchase from third parties
  • Liability for VAT
  • Deduction or refund of VAT
  • Obligations to file VAT returns
  • Administrative and invoicing obligations
  • VAT grouping
  • VAT deferment license
  • The rules for call-off-stock
  • Application of the zero rate/exemption for supplies within a VAT warehouse

At the end of 2020, a new decree of the State Secretary of Finance on the fixed establishment for VAT was published. In the update that you will find with this article, we will discuss the consequences of a fixed establishment for VAT. The following topics are dealt with: 

  1. The VAT consequences of a fixed establishment for services provided to third parties;
  2. The VAT consequences of a fixed establishment for services purchased from third parties; 
  3. The liability for VAT in case of a fixed establishment; 
  4. The deduction and refund of VAT;
  5. Declaration, accounting and invoicing obligations in case of a fixed establishment; 
  6. VAT grouping and fixed establishment;
  7. Fixed establishment and international trade in goods.

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If you need any further information, please contact one of our VAT advisers. We will be pleased to help you!